Thursday, December 1, 2016

Savannah fossil fuel PLC (“Savannah”) is happy to announce that it's hosting a visit for analysts and investors to the Company’s operations and offices in Niger.

Today, displays are going to be given by Savannah’s management and operational team, and can embrace the subsequent highlights:

 Review and update of the Company’s abstract development answer for potential Agadem discoveries, with associate calculable US$200m (c.50%) reduction in external funding prices to 1st oil for a c.75 mmbbls development; an extra export route for Agadem crude to the Kaduna works in northern African country is currently advancing; CGG has reviewed the {price} structure and associated economic modelling given by Savannah in regard to the revised abstract development answer and assessed a breakeven oil price of US$26/bbl and NPV10 of US$5.1/bbl at US$60/bbl to be affordable for the Agadem-Kaduna pipeline export option; sturdy encouragement in regard to new businessman exploration play varieties and better recovery factors; R3 3D unstable acquisition on course, with survey completion calculable for February 2017; Exploration drilling remains on course to begin in 1H17.

In addition, in a very separate announcement, the corporate is nowadays asserting the signature of a note of Understanding with the New {nigeria|Nigeria|Federal Republic of African country|African country|African nation} Development Company Ltd (“NNDC”) and Nigeria National fossil fuel Corporation (“NNPC”) in regard to collaboration between the 3 parties within the Nigerian section of the Central African Rift System. except for what's made public on top of, no new material data is predicted to be disclosed.

Conceptual Development answer

Savannah has completed a close review and update of its abstract Development answer (“CDS”) for potential discoveries on the R1/R2 and R3/R4 allow areas within the Agadem Rift Basin (“ARB”) originally given on eight July 2015. This review has considerably valid Savannah’s confidence within the CDS, given: (1) the amount of engineering studies and work that has fed into the review; and (2) that updated western-supplier value estimates are incorporated.

As before, the CDS continues to create by mental act Savannah implementing a “Hub and Spoke” development conception kind of like that utilized and projected by alternative regional operators. It envisages a Central process Facility (“CPF”) settled in shut proximity to a bunch of core manufacturing fields that gives centralised development utilities and that is tied into export infrastructure. further fields, with their own Field Production Facilities (“FPF”) area unit assumed to be tied back to the CPF. during this method, the CDS is seen by Savannah as a extremely versatile development answer, capable of growth or replication to include further resource as and once needed.

The principal distinction between the 2 solutions is that the materially reduced overall external funding demand of the new CDS versus the previous CDS. This has been achieved through a spotlight on the transfer of cost to in operation expenditure, the foremost important side of that has been the introduction of associate a Early Production Facility employing a important volume of rental instrumentation (tanks, pumps, process skids, etc.) that is predicted to be enforced in parallel to the development of definitive facilities. Indicatively, the external funding demand for the sphere facilities (i.e. the most cashflow drawdown) is calculable at c.US$200m for a c.75 mmbbl development underneath the new CDS, versus c.US$410m underneath the previous CDS. The distinction in internet gift worth (NPV10) between the 2 solutions has been assessed by CGG and is calculable to not be important.

Export Infrastructure

Over the course of recent months, discussions between relevant governmental and company stakeholders have progressed materially in regard to the export of businessman crude to the Kaduna works in northern African country. Discussions create by mental act the initiation of associate Agadem-Kaduna early export system victimisation trucks before the development of a c.800km pipeline answer.

CGG has reviewed the event plans and associated economic modelling in regard to the Agadem-Kaduna export choices. The principal conclusions of this work area unit that supported current assumptions the subsequent has been assessed as reasonable:

 The breakeven oil worth (to generate a tenth come on invested with capital) for crude piped to the Kaduna works is calculable at US$26/bbl with a internet gift worth (“NPV10”) at a semipermanent oil worth of US$60/bbl (inflated at a pair of p.a.) per barrel of US$5.1/bbl; The breakeven oil worth (to generate a tenth come on invested with capital) for crude trucked to the Kaduna works is calculable at US$35/bbl with associate NPV10 at a semipermanent oil worth of US$60/bbl (inflated at a pair of p.a.) per barrel of US$3.7/bbl.

It ought to be noted that the Agadem-Kaduna export route is seen as being additionally to the already considerably progressed third party planned extension to the Chad-Cameroon pipeline, therefore making optionality in regard to potential Agadem crude offtake.

License space Prospectivity

As antecedently declared on five July 2016, Savannah has currently known 118 exploration targets across the R1/R2 and R3/R4 PSC areas, whereas CGG has calculable the gross best estimate risked recoverable prospective resources at a pair of,185 mmbbls, victimisation its proprietary “yet-to-find” methodology. At today’s visit, Savannah can offer background data in regard to this prospectivity.

The Company will offer a discussion around: (1) the potential for extra exploration play varieties within the businessman; and (2) the potential for inflated ARB recovery factors over time given the encouraging field performances seen to this point. whereas each of those developments area unit encouraging, Savannah believes at this stage it's premature to quantify their associated resource potential.

Seismic Acquisition

To date, smart progress has been created with a median of c.9km2 of knowledge noninheritable per day on the Company’s c.800km2 3D unstable survey presently being conducted over a little of the R3 license space. The survey is presently expected to be complete in February 2017. As antecedently declared, it's anticipated to supply bigger definition over twelve existing mapped exploration targets whereas conjointly being expected to spot further exploration targets not presently mapped on the Company’s existing 2nd unstable dataset.

Drilling Plans

Savannah has continuing to progress its plans to begin drilling activity on its Niger allow areas in middle H1 2017, that it raised funds for in its recent equity inserting. Well proposals are issued, and technical and business discussions area unit ongoing with contract signature expected in Jan 2017. The drilling contract structure {is expected|is predicted|is associateticipated} to substantiate an initial 3 well drilling campaign, with a series of further choices to lock in instrumentation convenience and associated value structure for extra drilling thenceforth. The campaign is predicted to ab initio target the c.93 mmbbls Damissa structure (located on the R1 allow area), the c.37 mmbbls Bushiya structure and c.35 mmbbls Kunama structure (both settled on the R3 allow area).

Foumakoye Gado, Niger Minister of Energy and fossil fuel, said:

“I would really like to warmly welcome the capitalist teams Savannah has invited to our country. i'm certain they're going to realize Niger to be chance wealthy, with a stable and confirming investment surroundings. Attracting further foreign investment to Niger is crucial to our future development and thus having such capitalist teams visit our country is incredibly encouraging.”

Andrew Knott, business executive of Savannah fossil fuel, said:

“Over the course of the positioning visit our core stakeholders are going to be exposed to each side of Savannah’s business, sanctionative them to realize associate understanding of the substantial unrecognised worth inherent in our Niger project and the way we have a tendency to will unlock this over the course of the approaching months and years.

The sturdy momentum round the development of a replacement second export answer and also the political economy related to this area unit extremely encouraging as has been the numerous reduction within the external funding value related to associate businessman development.”

Steve Jenkins, Chairman of Savannah fossil fuel, said:

“The volume of underground work Savannah has currently completed as an organization is substantial, amounting to in more than a pair of,500 man days. we have a tendency to area unit very happy that this work has valid our reasons for coming into the businessman within the 1st place, i.e. that our allow area unitas contain an oversized volume of low-risk and low value oil structures – and are terribly excited to shortly be going in the drilling section of the project.

Over the course of the positioning visit our guests are given the chance to go to our field operations, meet with our core Nigerien stakeholders and be a close company update. i'm assured that this can alter folks to raised perceive Savannah as a business and also the potential to get significant worth.”

Steve Jenkins, Chairman, and Phil Magor, Chief man of science, have scan and approved the technical revelation during this regulative announcement in their capability as qualified persons underneath the AIM Rules. Mr. Jenkins could be a qualified man of science, with thirty two years’ expertise within the oil and gas trade, and could be a Fellow of the earth science Society. Mr. Magor could be a qualified man of science, with thirty five years’ expertise within the oil and gas trade, and could be a member of the Society of fossil fuel Engineers.